The United States and Israel announced on Thursday they were quitting the UN’s cultural agency Unesco, after Washington accused it of anti-Israeli bias.

The withdrawal of the United States, which is meant to provide a fifth of Unesco’s funding, is a major blow for the Paris-based organisation, founded after the second world war to help protect cultural and natural heritage around the world.

Unesco is best known for designating World Heritage Sites such as the ancient city of Palmyra in Syria and the Grand Canyon National Park.

“This decision was not taken lightly, and reflects US concerns with mounting arrears at Unesco, the need for fundamental reform in the organisation, and continuing anti-Israel bias,” State Department spokeswoman Heather Nauert said in a statement.

Unesco director general Irina Bokova expressed her disappointment: “At the time when conflicts continue to tear apart societies across the world, it is deeply regrettable for the United States to withdraw from the United Nations agency promoting education for peace and protecting culture under attack,” she said.

“This is a loss to the United Nations family. This is a loss for multilateralism.”

Nauert said the State Department had notified Bokova of their decision earlier on Thursday.

“The United States indicated to the director general its desire to remain engaged with Unesco as a non-member observer state to contribute US views, perspectives and expertise on some of the important issues undertaken by the organisation, including the protection of world heritage, advocating for press freedoms and promoting scientific collaboration and education.”

Washington has already withheld its funding for Unesco since 2011, when the body admitted Palestine as a full member. The United States and Israel were among just 14 of 194 members that voted against admitting the Palestinians. Washington’s arrears on its US$80 million annual dues since then are now over US$500 million.

Although Washington supports a future independent Palestinian state, it said this should emerge out of peace talks and it considers it unhelpful for international organisations to admit Palestine until negotiations are complete.

A native of Bulgaria, Bokova defended Unesco’s reputation, noting its efforts to support Holocaust education and train teachers to fight anti-Semitism. She traced the decades-long US ties with Unesco, and noted that the Statue of Liberty is among the many World Heritage sites protected by the agency.

Bokova’s two terms as director have been marred by funding troubles.

In recent years, Israel has repeatedly complained about what it says is the body taking sides in disputes over cultural heritage sites in Jerusalem and the Palestinian territories.

“Today is a new day at the UN, where there is price to pay for discrimination against Israel,” Israel’s Ambassador to the United Nations Danny Danon said.

Under Unesco rules, the US withdrawal will become effective as of the end of December 2018.

The US move underscores the scepticism expressed by President Donald Trump about the need for the US to remain engaged in multilateral bodies. The president has touted an “America First” policy, which puts US economic and national interests ahead of international commitments.